The Biggest Difference Between Using a Pigovian Tax or a Tradable

Multiple Choice

The biggest difference between using a Pigovian tax or a tradable allowance to correct for a negative externality is:

A) the government collects revenues from a Pigovian tax, whereas a tradable allowance allows private parties to trade quota rights on their own.
B) a Pigovian tax creates an efficient outcome, while a tradable allowance does not.
C) a Pigovian tax maximizes total surplus, whereas a tradable allowance does not.
D) All of these are differences between Pigovian taxes and tradeable allowances.